02.28.2023 - The International Foodservice Manufacturers Association (IFMA) released its 2023 and 2024 Foodservice Industry and Segment Projections today. The forecast, which is hosted on the IFMA Scope® platform, projects that operator spend in the foodservice industry will grow by 0.1 percent, considered flat on a real basis, in 2023, compared to 2022.
The forecast models were created in conjunction with Datassential, a leading foodservice research firm, and validated by operators from the IFMA Foodservice Leadership Councils.
Flat Growth in 2023 while Industry Inflation Projected to Be 7%
While the projection is for flat growth in 2023 in real terms, IFMA also projects that the industry will see inflation of 7 percent. This means most foodservice segments will spend more in 2023 than they did in 2022 (due to higher cost of goods rather than increased consumer demand).
The projections are based upon several key assumptions, including supply chain constraints, labor shortages, an economic downturn, and many white-collar employees continuing to work remotely rather than in the office.
“The forecast is a bit of a mixed bag,” said Phil Kafarakis, IFMA President & CEO. “We’re considering flat growth a mostly positive sign, but the impact of inflation will be felt across segments. We also have concerns about current fluctuations in consumer confidence, especially around discretionary spending. Recent restaurant industry reporting indicates lower same-store-traffic and moderating delivery sales.”
Some of the key highlights from the 2023 segment real growth comparisons to 2022 include:
- The total restaurant category – including full-service and limited-service restaurants – is projected to decline 0.6 percent. This expected decline is due to diminishing consumer demand due to a projected economic downturn.
- Quick service restaurants (QSR), which have performed significantly better in recent years than other segments overall, are projected to only decline 0.1 percent, while the Fast Casual segment declines 1.3 percent.
- Full-service restaurant segments, including Midscale and Casual Dining, are also both projected to decline in 2023, down 2.2 percent and 0.7 percent, respectively.
- Collectively, on-site segments in 2023 are projected to grow 2 percent, largely because their recovery from 2020 was slower than that of restaurants. The Lodging and College & University segments are expected to lead on-site growth at 3.1 and 2.2 percent, respectively.
Looking ahead to 2024, IFMA projects that the foodservice industry will have flat real growth. The total restaurant category is expected to decline 0.3 percent, while the total on-site category is projected to grow 1.3 percent, on a real basis.
As Kafarakis remarked, “IFMA strongly believes that information like this, that we provide through IFMA Scope®, ultimately helps our members and the industry prepare and plan for managing volatility and uncertainty.”
IFMA members can access all projections, including data on the Retail Foodservice category, through the IFMA Scope® portal, which provides an interactive and immersive view of real-time segment and market demographic information to aid in business planning.